Albert Einstein once said that income tax is probably the hardest thing to comprehend in this world. However, what most people find the hardest nowadays, especially in countries where corruption is very evident, is filing income taxes. People ask, "Why pay for higher toll rate fees if some sections of the road are bumpy, and even worse, closed?" "Why pay for water when there is poor quality and supply?" "Why pay for high electricity when there is always power failure?" The list of questions is endless and these are what compel people from escaping their taxes. What, though, is an income tax?
Income tax is defined as a yearly charge expunged from both earned and unearned income. Earned income here refers to money a person makes from wages, commissions, and salaries. Unearned income, on the other hand, refers to money that comes in from leases, rents, interest, and dividends. There are two specific categories of income tax - personal income tax, or tax levied on incomes of individuals and corporation income tax, or tax levied on the net earnings of corporations. Governments impose taxes to finance national operations and projects (such as public education and healthcare), to ensure population security, to distribute wealth among people, and to gather information about the country's economic and financial status.
That's why it's crucial to file your income tax every year. Fortunately, filing of income tax is not as stressful as before where you'd have to endure long lines at the filing center. With tax preparation software, such as TurboTax, that's widely available these days, you never have to spend another stress-filled day filing your income tax. What's more, you can get your TurboTax coupon code online, which would allow you to purchase the software at a discounted price.
Income tax is the government's largest source of revenue and if a big part of the population escapes the responsibility of settling their contribution, then a country's capacity to sustain its people is in jeopardy. Generally, personal income taxes account for approximately 45% of a government's revenue while corporate income taxes contribute about 12%. Put together, income taxes tend a whopping 57% of a nation's overall profit. Other sources of government income include payroll taxes (social security, Medicare, retirement taxes) which account for 36% of the revenue, excise taxes which contribute another 3% and miscellaneous taxes which account for 4%.
This information alone tells us how important it is for people to pay taxes. It doesn't matter if you're paying personal tax or business taxes. If 45% of the population makes the big mistake of avoiding their taxes, then the government will lose a big chunk of its revenue. Government will not be able to fund infrastructure projects, health services, education, elections, agriculture, urban development, etc.
So try to learn more about the software mentioned earlier, as well as similar ones like TaxAct, free tax usa, and H&R Block. You'll discover how easily and more convenient paying taxes will be with the help of the software.
Some people are tempted to refrain from paying taxes because of poor governance and corruption. However, this idea of not paying will do people no good because the truth of the matter is, people are bound to pay taxes and no one can escape this responsibility. Besides, with the tax preparation software, you can calculate gross income taxes accurately; thus, you're paying the rightful taxes you should be paying and doing so without breaking sweat.
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